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Americans Losing Trust in Banks, Gaining Trust in CUs

Wednesday, November 12, 2014 6:30 AM

Half of American adults say they have lost trust in their banks over the last few years, according to a recent Harris Poll. By comparison, 49 percent of the respondents said their trust in credit unions has remained the same in recent years.

Banks were not the only institutions to receive a low rating in the poll. Americans also reported losing trust in Wall Street and mortgage lenders, both seeing a 57 percent decline.

One out of 13 households is unbanked, based on a 2013 study by the FDIC. This equates to nearly 10 million households.

Several factors determine how likely Americans are to trust a financial institution. About 66 percent of poll participants said personal experience is the most important factor, while 56 percent said they looked at the quality of customer care, quality of products and services, or money charged in fees.

Local banks and credit unions with a smaller area of influence have higher trust levels than nationwide financial institutions. Over three-quarters of those surveyed reported a great deal of trust for local credit unions, while 70 percent said the same for local branches of a regional bank. Only 50percent of Americans trust large national banks.

Online-only banks are fighting a battle in establishing trust with a majority of Americans. Only 39 percent of the respondents have any trust with online-only banks. Not surprisingly, Millennials and Gen X’ers (42 percent) have more trust in these institutions than older adults (30 percent). In addition, consumers in the East and West are more likely to trust online-only banks than respondents in the South or Midwest.